Payday Loans: Join the fightback

By Bernadette Meaden

April 27, 2012

The UK has become a magnet for payday loan companies that target the poor. Other countries limit the interest these companies can charge, but here in the UK the sky’s the limit, so more and more firms are moving in to make a killing. Along with the increasing demand for food banks, the proliferation of these companies on our high streets sum up what a harsh and unforgiving place Britain has become for the poor.

Payplan which provides free help with debts, has seen an explosion in the numbers of people in trouble with these loans, and most of them have borrowed to cover basic costs such as food and transport, not luxuries.

Stella Creasy, MP for Walthamstow, has tabled an Amendment to the Financial Services Bill which would give the new Financial Conduct Authority the power to put a cap on what loan companies can charge. There is a twitter campaign called #savebianca! after the Eastenders character with debt problems.

The Amendment has attracted real cross-party support, but the government is mysteriously opposed. It surely could not be connected to the fact that the owner of Wonga (representative APR 4214%) has donated around £600,000 to the Conservative Party. Could it?

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